Chapleau sawmill fortunes cut both ways

May 12, 2004

By: Peter Oatway

The community of Chapleau suffered a blow as Domtar announced it will be reducing its operations by one shift. This announcement came shortly after Tembec purchased the former Weyerhaeuser sawmill. Approximately 64 employees will be affected by the move and will cut the annual production of the mill by 32.5 million board feet per year. Domtar is uncertain of how long the second shift will remain idle. Vice president of Ontario sawmills for Domtar_s forest products group Stewart Marcoux stated in a press release that the cause is due to a substantial reduction in wood supply. _We have exhausted our surplus wood inventories in the Spanish Forest,_ Marcoux said. New forestry guidelines have reduced harvest levels in the Spanish Forest as well as newly created parklands and protected areas. That coupled with a strong Canadian dollar and 27 percent tariff on lumber going to the United States has created problems for the Northeast region of Ontario, Marcoux explained. Chapleau_s deputy mayor Buddy Swanson said that the layoffs are detrimental to the community of approximately 2,600. _We_re a small community with a small economic base,_ Swanson said. The town is working on the situation with the community adjustment and labour adjustment committees, Swanson explained. With Tembec_s purchase of the Weyerhaeuser mill in December of last year, Swanson said that it offers some stability to the workforce. _Tembec seems to be very upright and confident and moving forward in our community,_ he added. Operations superintendent for the Tembec sawmill Don Bazeley said that the transaction went smoothly and the mill is continuing to operate with two shifts. The mill employs approximately 140 people and produces between 85 and 90 million board feet of softwood lumber annually. _Right now things are going okay,_ Bazeley added. There are no major changes scheduled for the mill in the near future, but Tembec is planning to make some investments in the planer, he said. Executive vice president Jim Lopez said that the mill itself is a stand alone facility in terms of wood supply. Given the mill_s location in conjunction with Tembec_s other sawmills it does not allow for cross shipping of the wood supply. The wood supply for the mill offers 500,000 cubic metres of quality wood with year-round delivery at a reasonable cost. The purchase of the mill helps to secure the wood chip supply for a joint venture Tembec has with Marathon Pulp. Lopez said that the Chapleau mill was a key supplier for the pulp mill. _We think that the mill has a promising future,_ Lopez said. He sees the purchase of the Chapleau sawmill as a good quality investment with a good wood supply for Tembec as the company is looking to grow its sawmill operations. _It_s a good mill with a bright future, so that_s why it_s ours,_ Lopez said.